Glossary: hotels and data centre sites in Italy

The definitions are deliberately short and meant for orientation. Where a term carries legal or tax consequences, its precise content should be checked with a qualified professional. Italian terms are given where investors will meet them in documents.

Hotels

ADR (average daily rate)

Average room revenue per room sold over a period: room revenue divided by rooms sold.

Business lease (affitto d’azienda)

A contract under which the owner leases the hotel business as a whole to an operator, with the property as one element. The operator becomes the entrepreneur and pays rent.

Capex

Capital expenditure. In a hotel, separate deferred maintenance, the periodic furniture and equipment cycle, and investment that adds value.

Due diligence

The documentary, financial, technical and legal review a buyer carries out before signing.

EBITDA

Earnings before interest, tax, depreciation and amortisation. In family-owned hotels it has to be normalised, removing personal costs and off-market salaries.

FF&E

Furniture, fixtures and equipment, with its own renewal cycle.

Franchise (affiliazione)

A contract under which a hotel adopts a brand, its standards and its distribution, for fees, while operation stays with the owner or the owner’s operator.

Hotel lease (locazione alberghiera)

A lease of property used as a hotel. Under Italian law it has a minimum term of nine years, subject to the permitted exceptions.

Key money

A sum an operator or brand pays the owner on signing a contract, in return for the term or conditions obtained.

Letter of intent (LOI)

A document setting out the main terms of an offer (price, structure, conditions, timing) ahead of final contracts. Usually non-binding, save for specific clauses.

Management agreement

The owner keeps the business and its result, and a professional operator runs the hotel on the owner’s behalf for a fee.

NDA (confidentiality agreement)

An undertaking not to disclose information received, signed before the hotel’s name or data are shared.

Occupancy

Rooms sold as a percentage of rooms available over a period.

Price per key

A transaction price divided by the number of rooms. Useful for comparison, but only between transactions that are genuinely comparable in product, market and condition.

RevPAR

Room revenue per available room: ADR multiplied by occupancy. It measures rate and fill together.

Sale and leaseback

A sale of the property with a simultaneous lease back to the seller, who carries on running the hotel.

Success fee

An adviser’s fee tied to completion of the transaction, as agreed in the engagement.

Data centre sites

Connection agreement

The agreement with the grid operator that sets the works, timing, costs and security for a connection.

Grid intake MW and IT MW

The first is the power drawn from the grid; the second the power available to IT equipment, after cooling and other loads.

Planning variant (variante urbanistica)

A change to the planning instrument, needed where the land’s current use is not compatible with a data centre. An industrial classification is not a data centre permission.

Primary substation (cabina primaria)

The installation linking the high-voltage grid to distribution. Distance to one with available capacity is among the first tests of a site.

Requested power

The project’s requirement, or the power stated in a connection application. It is not available power.

RTN

The national transmission grid (rete di trasmissione nazionale), high and extra-high voltage, run by Terna.

STMG

Soluzione tecnica minima generale: the grid operator’s response to a connection request, setting out the solution and fees, which the applicant must accept.

STMD

Soluzione tecnica minima di dettaglio: issued after permitting, it fixes the connection works and costs.

Usable capacity

The power a project can actually rely on, with works completed and supply conditions defined.